Diego Serrano

Nicholson Cano and PAGBAM advise on new San Miguel sustainable notes issue

Nicholson y Cano has acted as legal counsel to San Miguel, a producer and exporter of lemons in the southern hemisphere, and Pérez Alati Grondona Benites & Arntsen as counsel to the arranger and the underwriters, on the issuance of additional series IX senior unsecured notes, linked to the sustainability of the Issuer.

The issue was made on 2 October under its global programme for the issuance of simple negotiable obligations for a nominal value of up to US $250,000,000. The Additional Series IX Notes were issued for a nominal amount of US$ 33,600,000 at an Issue Price of 1.0008, are denominated in US dollars and payable in Pesos at the Applicable Exchange Rate; at a fixed rate of 5% nominal per annum (which may be increased as detailed below), maturing on 26 June 2025.

The funds obtained will be applied to the integration of working capital and the refinancing of San Miguel’s short-term liabilities.

The Additional Series IX Notes were issued in line with the Sustainability-Linked Bond Principles contained in the Guidelines for the Issuance of Thematic Securities in Argentina included in Annex III of Chapter I of Title VI of the Rules of the National Securities Commission and in the Sustainability-Linked Bond Guide and the Regulations for the Listing of Notes and Public Securities of Argentine Stock Exchanges and Markets.

Except for the initial exchange rate, the issue and settlement date, the issue price and payment date thereof and the exchange ratio, the Additional Series IX Notes have the same terms and conditions as the Series IX Notes issued on 26 June 2023 for a nominal value of US$ 55,000,000, constituting a single series and being fungible with each other.

According to such terms and conditions, as from 26 September 2024, the interest rate of the Series IX Notes would increase by the greater of: (i) 1% per annum, i.e. 100 basis points, provided that it does not exceed 25% of the applicable interest rate (in which case 25% of the interest rate will apply); or (ii) will be increased by 0.50% per annum, i.e. 50 basis points, unless San Miguel demonstrates compliance with a sustainability performance target of achieving a 70% share of renewable energy to supply its industrial complex, which would imply achieving a 49% reduction in greenhouse gas emissions (CO2 Equivalent) within the 12-month period beginning on 31 August 2023 and ending on 31 August 2024.

Banco Santander Argentina acted as arranger and underwriter; while Allaria, Balanz Capital Valores, Latin Securities, Banco de la Provincia de Buenos Aires, TPCG Valores, StoneX Securities, Facimex Valores, Puente Hnos, Invertir en Bolsa, Mills Capital Markets and Cocos Capital acted as underwriters.

Based in the Province of Tucumán, San Miguel is engaged in the production, marketing and export of fresh citrus fruits from the southern hemisphere. It is a key global player in the processing of value-added citrus products, accounting for 15% of global lemon grindings. San Miguel is recognised by its more than 200 international customers in over 50 countries as a reliable citrus producer with high quality standards.

PAGBAM’s team was led by partner Diego Serrano Redonnet (pictured), with support from associates Alejo Muñoz de Toro, Nahuel Perez de Villarreal and Mora Mangiaterra Pizarro.

L Giselle Estrada